Court Establishes Standard of Care for a Home Inspector
In Rimmer v. Building Insights Inc. (9 September 2013) Ontario Superior Court placed liability upon a home inspector. This was based in contract. The home inspection wasn’t faulty. It was performed correctly. And, there was no proof tendered at trial that the home inspector fell short of the expected standard of care.
An Issue for the Court:
What was the nature and scope of the duty owed by the defendant home inspector Building Insights to the plaintiffs?
The Court examined a number of issues very carefully in arriving at a conclusion. The facts (for other cases, going forward) are less important than the actual application in this case. These facts apply to this case, but the analysis will be used in other cases by other Judges.
As stated by the Court, on this issue, subject to my deletions and editing and commentary appear in Italics:
The Inspection Agreement was executed by Randy Rimmer, the homeowner, on site immediately prior to Mr. Langlois, the home inspector, commencing the inspection.
 The Inspection Agreement comprised one single-spaced page with six numbered sentences set out in bold print in the centre of the document. Some of the pertinent provisions of the Inspection Agreement, for the purpose of the issues in the action, included the following:
(i) the primary purpose of the inspection and the report is to educate the client about the general condition of the home through a visual examination of the readily accessible features of the property and reflects their condition at the time of the inspection;
(ii) the inspection is performed in accordance with the Standards of Practice of the Canadian Association of Home and Property Inspectors (CAHPI); This is the standard that was selected for this particular contract. It was therefore incorporated by reference and became part of the agreement.
(iii) it is not a contractual obligation, nor is it possible, for the inspector to identify latent or hidden defects solely based on a visual examination;
(iv) the Report shall be prepared with reasonable skill and care and reflect the inspector's opinion within the limitations of a visual inspection;
(v) the inspection is not intended to be technically exhaustive. No excavation or removal of obstructions will be performed;
(vi) the inspection is intended to reduce the risk associated with purchasing a home, however, Building Insights cannot eliminate the risk and will not assume any risk in connection with the home's condition, deficiencies, performance or lack thereof;
(vii) emphasis is placed on identifying major problems which may affect the value or sale price of the property;
(viii) existing buildings are not required to comply with today's codes in retrospect, therefore the report makes no claims to compliance or otherwise with any building or construction related codes or insurance company requirements currently in force;
(ix) the client is aware that the fee paid for the inspection is for professional time and is not a warranty or guarantee of present or future conditions and is not an insurance policy of any kind.
 The Inspection Agreement did not set out the fee to be paid by the plaintiffs for the inspection and report, however it was indicated in evidence that the fee paid was $375 plus tax.
 Although the Inspection Agreement required the inspection to be performed in accordance with the Standards of Practice of CAHPI, it was the Standards of Practice of the Ontario Association of Home Inspectors (OAHI), adopted from the American Society of Home Inspectors (ASHI) (version January 1, 2000), which were referred to in evidence as being the applicable standards referenced in the Inspection Agreement.
This was noted without objection. I could be the same or it could be different, but for the purposes of this lawsuit, the Ontario version was offered as evidence, and both parties were content with that.
 The stated purpose of the Standards of Practice is to establish a minimum and uniform standard for private, fee-paid home inspectors who are members of OAHI.
Paragraph 2.1 of the Standards stated that home inspections performed to the Standards are intended to provide the client with information regarding the condition of the systems and components of the home as inspected at the time of the home inspection.
 Paragraph 2.2 requires an inspector to inspect readily accessible systems and components of homes listed in the Standards of Practice and to report on:
a. those systems and components inspected which, in the professional opinion of the inspector, are significantly deficient or are near the end of their service lives;
b. the reason why the system or component is significantly deficient or near the end of its service life;
c. the inspector's recommendations to correct or monitor the reported deficiency; and
d. on any systems or components designated for inspection in the Standards which were present at the time of the inspection, but were not inspected and a reason they were not inspected.
 With respect to the structural system, paragraph 3.1 of the Standards requires the inspector to inspect the structural components including foundation and framing and to describe:
1. the foundation and to report the methods used to inspect the under-floor crawl space; and
2. the floor, wall, ceiling and roof structures and report the methods used to inspect the attic.
 Paragraph 3.2 provides that the inspector is NOT (capitalization in the original)
required to provide any engineering or architectural service or offer an opinion as to the adequacy of any structural system or component.
 Paragraph 13.1 provides that inspections performed in accordance with the Standards are not technically exhaustive and will not identify concealed conditions or latent defects.
 Paragraph 13.2 provides that inspectors are not required to enter under-floor crawlspaces which are not readily accessible.
The Law to be Applied Concerning the Duty of a Home Inspector
 The nature and scope of a home inspection, performed in accordance with the Standards of Practice of ASHI (adopted, as indicated above, by OAHI) was considered by Justice Gillese, as she then was, in the early (as far as the home inspection industry is concerned) case of Biggs v. Harris  O.J. No. 4831 (SCJ). She adopted the formulation stated by Justice Blenus Wright in the case of Selzer-Soberano v. Kogut,  O.J. No. 1871 (SCJ) at p. 2, as follows:
The usual home inspection is general in nature and is performed by visual inspection. A house inspector cannot be held responsible for a problem that is not readily apparent by a reasonable visual inspection.
 Justice Gillese found that, in determining whether the inspector conducted a "reasonable visual inspection," the applicable standard of care is that contained in the Standards of Practice of ASHI, and concluded, at para. 33, as follows:
The standard of care owed is that of a reasonable visual inspection done in accordance with ASHI standards but, I would add, what is reasonable is to be determined, as well, by the cost of the inspection and the known level of expertise of the inspector.
 The formulation of the scope and standard of care owed in the case of a home inspection performed in accordance with the Standards of Practice, enunciated by Justice Gillese in Biggs v. Harris, was adopted in the more recent case of Gesner v. Ernst 2007 NSSC 146 (CanLII), a decision of D.K. Smith A.C.J.S.C. Justice Smith stated it, at para. 129, as follows:
[An inspector] must meet the standard of care that would be expected of an ordinary, reasonable and prudent home inspector in the same circumstances.
When considering the standard of care owed by [an inspector] the court can take into account the standards of any relevant professional association relating to home inspectors. In addition, the court should consider the cost of the inspection and the known level of expertise of the inspector.
 A very useful summary of the scope of a typical home inspection was set forth by Stansfield, Prov. J. in Brownjohn v Ramsey 2003 BCPC 2 (CanLII), 2003 BCPC 2 (BC Prov. Ct.) (a case which, although a Small Claims Court decision, has been referred to with approval in a number of Superior Court decisions) at paras. 16-17, as follows:
The point made repeatedly in the PTP contract, and mentioned consistently in the various cases to which I was referred — but most importantly, which simply accords with common sense — is that
there are limits on what one reasonably can expect from a relatively brief visual inspection undertaken by someone who has no right to interfere with (and by that I mean no right to dismantle, nor to effect any permanent change in) the property which one must remember is not owned by the person requesting the inspection.
As well, as a matter of common sense one has to recognize that a service performed for a fee of $240.00 cannot be expected to be exhaustive.
The broad purpose of securing a residential home inspection is to provide to a lay purchaser expert advice about any substantial deficiencies in the property which can be discerned upon a visual inspection, and which are of a type or magnitude that reasonably can be expected to have some bearing upon the purchaser's decision-making regarding whether they wish to purchase the property at all, or whether there is some basis upon which they should negotiate a variation in price.
Broadly speaking, it is a risk-assessment tool.
 By the same token, it is noted that Stansfield, Prov. J. made the countervailing observation at para. 21 that
a home inspector is involved in an inherently risky business which invites reliance.
If prospective home purchasers did not believe they could secure meaningful and reliable advice about the home they are considering purchasing, there would be no reason for them to retain the inspector.
Application of the Law to this Case
 Based upon the foregoing, the following observations may be made with respect to the nature and scope of the inspection of the dwelling carried out by Building Insights:
(a) it was to be general in nature;
(b) it was to be based only upon a visual inspection of the readily accessible features of the dwelling;
(c) the obligation to report was to be limited to seriously deficient systems and components or those nearing the end of their useful life, or put another way, major problems which may affect the value or sale price of the property, discoverable upon a visual inspection, as set forth above;
(d) the inspection and report would not constitute a warranty, guarantee or insurance policy, as exemplified by the relatively modest fee paid for the service. It was to be a risk-assessment tool, not a risk elimination or a risk transfer mechanism, as an insurance policy or warranty would be;
(e) the standard of care to be adhered to was to be that of an ordinary, reasonable and prudent home inspector in the same circumstances, measured in the context of the Standards of Practice of the OAHI; and
(f) it would not call for engineering, architectural or other specialized professional expertise.
It is important to note that the law is set out in the parts of the case which I have indicated in BOLD.
What’s the standard?
The standard to be applied is that of:
1) an ordinary,
2) reasonable and
3) prudent home inspector
4) in the same circumstances,
5) measured in the context of the Standards of Practice of the OAHI.
So, that’s the test from a legal perspective. After that, we get into the facts of the case.
Brian Madigan LL.B., Broker